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600 TTC workers eyed in benefits fraud investigation

More than 5 per cent of all TTC employees — some 600 people — are being investigated for involvement in an ongoing benefits fraud scandal, the city’s auditor general says.

An annual report from auditor general Beverly Romeo-Beehler released Friday morning reveals for the first time the large scale of the investigation that was announced last year, now saying the false health-benefits claims totalled more than $5.1 million.

The auditor said that although more than 600 employees are being investigated, the total number of fraudulent claims is still to be determined.

TTC spokesperson Brad Ross echoed that statement.

“While 600 employees used the clinic in question, this does not mean that every employee engaged in improper behaviour,” Ross said Friday, adding that some employees did make legitimate claims. “As our investigation continues, we dismiss employees where evidence of fraud is clear.”

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He said that, to date, 12 employees have been fired for their involvement in the scheme.

Toronto police announced the alleged fraud last year after it was uncovered through the TTC’s integrity hotline.

Police said the alleged scheme involved employees at local orthotics store Healthy Fit providing receipts for services that were never received or inflating costs for insurance claims submitted by TTC employees to the transit service’s insurance provider, Manulife Financial. Healthy Fit and TTC employees then allegedly shared the payout, police said.

The owner of Healthy Fit and two employees were charged. Previously, the fraudulent claims were tallied at more than $4 million.

Ross said the TTC “will recover stolen money” from the employees, Healthy Fit and fraud insurance.

An ongoing investigation is being led by the TTC and Toronto police.

“This is concerning to us, that there’s been this assertion or allegation that literally hundreds of employees have been involved,” said Amalgamated Transit Union Local 113 president Bob Kinnear.

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In total, the auditor general’s office received 575 complaints in 2015, representing 800 separate allegations, the annual report says. At least a preliminary investigation has been done in 85 per cent of the complaints. Of those, 25 per cent were substantiated.

In addition to the $5.1 million in the TTC case, city losses totalled $286,000 in 2015.

Here are the highlights of several other major frauds carried out by city employees, according to the auditor:

In another fraudulent benefits scheme, a group of city employees were paid out a total $102,000 over “several years.” So far, only $28,000 has been recovered. Several employees have been fired.

A city employee skipped out on 800 hours worth of work before anyone noticed, receiving $40,000 in pay after the worker submitted made-up time logs. The employee was fired.

An employee claimed to be on jury duty for 44 days when the court wasn’t even sitting. In all, it cost the city $11,000. The employee was fired.

A single employee claimed $23,000 in false benefits claims over “several years.” The employee was fired.

Anonymous complaints said an employee was “conducting personal business on city time and using city resources,” but an investigation in the employee’s division, which was not identified, cleared the worker of any wrongdoing. When the auditor general’s office conducted its own investigation, it found the complaints were actually legitimate. The employee was fired.

Three members of the public were wrongly claiming city subsidies totalling $89,000, $55,200 and $16,600. The city is trying to get back the money in the first two cases. All of the $16,600 wrongly claimed in the third case has been recovered.

The city bought the wrong software after computer upgrades that forced them to purchase new licences so they could use the software on the new systems. That wasted an estimated $700,000.

A separate report from the auditor general on Toronto’s water billings and collections says the city is flushing millions of dollars down the drain. The city has no system to flag “high risk accounts,” needs to go after deadbeats, failed to properly add arrears to property tax bills, and let bill disputes drag on for years.

Some residents owe as much as $300,000 on their water bills. Of $1 billion billed to Torontonians for water in 2015, $70.9 million was outstanding as of September.

With files from David Rider

Auditor general’s findings by the numbers

44: Days one city employee claimed to be on jury duty while the court wasn’t even sitting.

5%: The percentage of all TTC employees now under investigation in relation to a fraudulent benefits claim scandal

12: The number of TTC employees that have been fired so far in that benefits fraud investigation

$5.4 million: The amount of actual and potential losses to the city from fraudulent claims made in 2015, the majority of which has yet to be recovered

800: The number of work hours one city employee skipped out on before anyone noticed. Losses in that case totalled $40,000. That employee was fired.

$300,000: The amount in payments some residents owe on their water bill. Of $1 billion billed to Torontonians for water in 2015, $70.9 million was outstanding as of September.

575: The number of complaints, representing 800 total allegations, submitted to the auditor general’s office in 2015. Of those, 85 per cent have been investigated and 25 per cent of the investigated claims have been substantiated.

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